State Republicans lower taxes for the rich, defund Planned Parenthood and try to block health care for the poor in Kasich-signed budget

With Gov. John Kasich’s signature,
Republican state officials on June 30 passed a budget that alters taxes,
schools, Medicaid and abortion services in Ohio, putting the state in a
controversial and politically charged path for the next two years.

For Republican officials, this was their
first big opportunity in years to show where they see Ohio going. The
$62 billion budget for fiscal years 2014 and 2015 was awash with
surpluses and momentum, largely driven by the state’s surprising
economic sprint out of the Great Recession — although that sprint has
slowed down to a limp in the past year.

Given that, it’s no wonder that there are
conservative, Republican marks all over the state budget. Despite big
electoral losses in 2012, Ohio Republicans seem undeterred from pushing
their conservative agenda — not just in terms of fiscal issues, but
social issues as well.

All told, the state budget cuts taxes in a
way that disproportionately favors the wealthy, fails to restore
education funding slashed in previous budgets, rejects increased health
care access for low-income Ohioans and limits access to abortion and
contraceptive care across the state.

At the same time, supporters claim the state budget puts Ohio on a sound fiscal path that will spur economic and job growth.

Although the budget contains much more in
its 5,300 pages, four areas are particularly notable and controversial:
taxes, school funding, Medicaid and abortion. CityBeat analyzed each of those sections to determine how they could impact Ohio in the future.

Taxes

Under the final version of the budget,
all Ohioans will pay lower income taxes, but they’ll also pay higher
sales taxes now and more property taxes in the future.

The budget cuts income taxes for all
Ohioans by 10 percent over three years, gives business owners a
50-percent tax break on up to $250,000 of annual net income and creates a
small tax credit for low- and middle-income working Ohioans. The plan
also has low-income protections: Anyone making $10,000 or less a year
won’t have to pay income taxes, and those making $30,000 or less a year
get a $20 credit for themselves and each person dependent on their
income.

To balance the cuts, the plan raises the
sales tax from 5.5 percent to 5.75 percent, hikes future property taxes
and graduates the homestead tax exemption to be based on need, meaning
low-income senior, disabled and widowed Ohioans will get the most from
the exemption in the future.

On balance, the plan favors the wealthy
and actually raises taxes for the poorest, according to a study
conducted by the Institute on Taxation and Economic Policy for
left-leaning think tank Policy Matters Ohio.

The analysis, which didn’t account for
the property tax changes, found those in the top 1 percent would see
their taxes reduced on average by $6,083, or 0.7 percent. The next 4
percent would pay $983, or 0.5 percent, less in taxes. Individuals in
the bottom 20 percent would pay about $12, or 0.1 percent, more in taxes
after the increased sales tax overtakes their slight reduction in
income taxes. The middle 20 percent would see a tax cut of $9, rounded
to 0 percent.

“Rather than approving a tax plan that
will further shift Ohio’s tax load from the most affluent to low- and
middle-income residents, we should direct those dollars into needed
public services,” said Zach Schiller, Policy Matters Ohio research
director, in a statement.

Michael Dittoe, spokesperson for Ohio
House Republicans, says the tax plan is supposed to provide a boost for
almost everyone, not any specific group. That boost, Republicans claim,
will drive further job growth.

Policy Matters disputes even that claim,
pointing to the state’s history with tax cuts: In 2005, Ohio passed a
21-percent across-the-board income tax cut.

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In the resulting years,
Ohio’s job market continued to underperform the nation — evidence,
perhaps, that vague tax cuts aren’t the key to job creation.

School funding

Compared to the previous budget, the
state budget increases school funding by $700 million. But the funding
is still $515 million less than Ohio schools received in 2009. The
result: Cincinnati Public Schools will receive $15 million less in state
funding than it did in 2009, joining three in four Ohio school
districts with a net loss during Kasich’s time in office.

Still, Republicans are calling the funding boost the largest increase to state education spending in more than 10 years.

Stephen Dyer, former Democratic state
representative and education policy fellow at left-leaning think tank
Innovation Ohio, says the claim is dishonest because it ignores
longer-term trends in funding. “It’s like they cut off both of your
legs, give you back one of them and say, ‘You should thank us,’ ” he
says.

Republicans defend the cuts by citing an
$8 billion deficit in 2011, which had to be eliminated under state law.
The resulting cuts directly impacted school funding, but the decreases
also eliminated subsidies that previously benefited schools, such as
tangible personal property reimbursements.

Dyer says the state budget situation has
changed since then. Instead of focusing on tax cuts, he argues state
legislators should have prioritized education funding.

He also criticizes how the funding is
distributed, citing state data to show some of the worst-off school
districts, particularly the poor and rural, get the smallest increases.

Even if there was full equity, Dyer claims there’s not enough money going into education as a result of years of cuts.

The budget’s tax changes could also
impact future local funding to schools. The state will not subsidize
12.5 percent of future property tax levies, which the state does for
current levies. For local taxpayers, that means new school levies will
be more expensive and likely more difficult to pass in the future.

Medicaid

Right before signing the budget into law,
Kasich vetoed a provision that banned Ohio from taking up the federally
funded Medicaid expansion. The move was largely symbolic — Republican
legislators still rejected the Medicaid expansion by excluding it from
the budget — but Kasich’s veto was a principled end to the budget
debate.

Under the Affordable Care Act
(“Obamacare”), the federal government is asking states to expand their
Medicaid programs. States are given a powerful financial incentive for
doing so: For the first three years, the expansion is entirely paid for
by the federal government. Afterward, the federal commitment is dropped
to 90 percent, where it will indefinitely remain. The federal government
on average pays about 57 percent of Medicaid costs, while states pay
for the rest. So the 90-percent match for the expansion is a uniquely
lucrative deal.

Earlier this year, the Health Policy
Institute of Ohio released an analysis that found the Medicaid expansion
would insure nearly half a million Ohioans and save the state about
$1.8 billion in the next decade.

But Republican legislators say they’re
skeptical the federal government can afford such a commitment to
Medicaid, often calling the expansion unprecedented.

Col Owens, co-convener of the Southwest
Ohio Medicaid Expansion Coalition, claims there is a precedent for the
Medicaid expansion: Medicaid itself. He says the federal government has
historically upheld its commitment to Medicaid, which insures 2.2
million Ohioans. There’s no sign that commitment will stop any time
soon. Instead of being concerned about fiscal problems, Owens says
opponents of the Medicaid expansion simply dislike the president,
Obamacare and Medicaid.

Dittoe rejects that notion. He points out
the budget increases Medicaid funding by $1 billion, allowing 231,000
more Ohioans to enroll.

But the federal government already
expects Ohio to pay for those Medicaid enrollees, who are eligible under
current rules but have yet to enter the system for whatever reason.
Failing to do so would have likely violated the state’s Medicaid
agreement with the federal government and, as Dittoe acknowledges when
asked by CityBeat, resulted in penalties.

Although the Medicaid expansion didn’t
make it into the state budget, a bill currently sitting in the House
would take up the expansion. It could be considered in the early fall.

Abortion

The state budget takes a slew of
anti-abortion measures, placing Ohio among states like Texas and North
Dakota that have taken a renewed interest in limiting access to
abortions.

The state budget forces doctors to
perform an external ultrasound on a woman seeking an abortion and inform
the patient whether a heartbeat is detected and the statistical
probability of the fetus making it to birth.

That provision is in addition to a slew
of other anti-abortion measures: regulations that allow the state health
director to shut down abortion clinics by blocking mandated patient
transfer agreements, less funding for Planned Parenthood and other
clinics — even some that offer contraceptive services but no abortion
services — through reprioritized family planning grants, a ban that
stops publicly funded rape crisis programs from discussing abortion as a
viable medical option for rape victims and shifted federal funding for
anti-abortion, pro-abstinence crisis pregnancy centers.

In short, the budget makes it harder to
access contraceptive care that prevents pregnancies, then it makes it
harder to terminate an unwanted pregnancy.

For Republicans, the goal is “to maintain the sanctity of human life,” says Dittoe.

Abortion-rights advocates have criticized
the measures as an attack on women. “If the governor and members of the
Ohio General Assembly want to practice medicine, they should go to
medical school,” says Kellie Copeland, executive director of NARAL
Pro-Choice Ohio.

Throughout the budget process, NARAL
repeatedly called on Kasich to line-item veto the measures — a move that
would have kept the rest of the budget in place but nullified the
anti-abortion provisions.

But Kasich, who describes himself as “pro-life,” ultimately ignored the pleas.

For both sides, much of the debate has
centered around Planned Parenthood, which provides abortion services,
sexually transmitted infection and cancer screening, pregnancy tests,
birth control and various other health care services for men and women.

Supporters point out no public funds go
to abortion services, which are entirely funded through private
donations. Public funds are instead spent on other services. But Dittoe
says Republicans still take issue with the abortion services, and it’s
the sole reason Planned Parenthood is losing funding.

“Members of the House who have issues
with Planned Parenthood have only issues with the abortion services,” he
says. “The rest of what Planned Parenthood provides, I imagine they
have no issue with whatsoever.”